Tag Archive | "F&I"

Key To F&I Success: Attract and Attain Top-Notch Personnel

As an agent for auto dealers who intends to stand out above the crowd, one of our main focuses is income development. We thrive on making the dealers’ front and back grosses increase, while improving customer relations, and helping dealers sell more units.

Frequently, however, we are asked, “How do you really make the needle move?” Clearly, this question is highly complicated, as there is no ‘magic dust’ that can simply be used with 100 percent success in every dealership. If I had to pick the next best thing to a magic solution, however, it would certainly be attracting and attaining the absolute best personnel.

This begs several questions, of course. How can dealers ensure they hire the best possible people? What are the things to look for to know if someone is a good fit? What types of questions should dealers ask interviewees?

Hiring the best people requires patience. An industry-renowned motivational speaker, Dave Anderson, says we should “hire slow, fire fast.” Typically in the car business, we do the exact opposite of that. Lots of times we fall in love with a candidate due to their overall likeability, their resume or the level at which they came recommended, and we don’t really uncover the information that will lead us to know if they can succeed.

Instead, we should take our time through the interview process. Always line up multiple candidates, regardless of how good the first one you run across may be. When you perform interviews, test an interviewee’s most important traits by asking the right questions. When do you want to know that a candidate has the appropriate talent, drive and character to do the job? Before you hire them!

Want to test sales talent? Try asking them to sell you a random, inanimate object. You’re looking for them to ask you questions about how you plan on using the product. A natural ability to sell will always do this.

Want to test character? Try asking them about a time they had a disagreement with a boss and how it was resolved. You will be amazed by the outpouring of honestly that occurs in these situations. Furthermore, if they can’t name a single time this has happened, you know they’re either lacking drive, or they’re lying.

Want to test drive? Ask them if they’d rather have a job working 40 hours a week, making $50,000 or working 60 hours a week, making $90,000. You’ll find out a TON about what motivates them and what their work ethic will be like.

Clearly, there is no certain way to always find the best hires. One thing is certain, however, and that’s by being patient and thorough, you can overcome many of the hiring mistakes that are commonly made. At the end of the day, the single biggest factor in being able to move the needle is having motivated, high-character, highly-driven individuals. All the training in the world won’t help unless you have someone willing to learn.

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F&I Performance Down in 2009, NADA Reports

The recession’s effects on the industry last year wasn’t lost on F&I, according to the National Automobile Dealers Association’s DATA report, which showed declines in aftermarket income, F&I and service-contract acceptance rates.

Aftermarket income (combined gross from F&I and service contracts) fell to 25.7 percent of new- and used-vehicle department gross profit in 2009, down from nearly 30 percent in 2008 “as customers economized during the deepening recession,” the report stated.

F&I and service-contract penetration rates fell for new and used vehicles combined, as financing became difficult for customers with credit rated “Alt-A” and below.

Service-contract penetration for new vehicles held share at 32.4 percent in 2009, far from the relative peaks of 35 percent in 1986 and 34 percent in 2004.

On a positive note, 2009 did show some improvements from the previous year.

Gross profit margin on new-vehicle sales was 4.5 percent of the selling price in 2009, up from 4.4 percent in 2008 when gas prices were volatile.

Last year also saw a year-over-year improvement in new-vehicle F&I penetration, which stood at 55.7 percent in 2009.

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UDS Launches F&I Webinar Series for Dealer Partners

CLEARWATER, Fla. – United Development Systems, Inc. (UDS) has launched the UDS Webinar Series – aimed at bringing its award-winning F&I Training directly to its partners.

“Our promise to our dealer partners is monthly training on various F&I related topics,” said Randy Crisorio, UDS president and CEO. “Using webinar technology will allow us to more conveniently and consistently deliver on that promise to present quality F&I training solutions.”

The UDS Webinar Series will consist of monthly online sessions covering a variety of F&I-related topics. Planned topics will range from The F&I Interview Process, to Lender Relations, Compliance, and AutoMenu(TM) Selling Strategies.

Each webinar will last 60 minutes or less, enabling even the busiest of managers an opportunity to login and participate. Additionally, UDS dealer partners will have unlimited access to archived sessions via its websites’ partner portal.

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Zurich Enhances F&I Product Offerings with Zurich Shield Windshield Protection

SCHAUMBURG, Ill. – Automobile dealers can now offer their customers a full array of finance and insurance (F&I) products from Zurich, a provider of F&I products for automotive businesses in the United States, with the release of Zurich’s new F&I product – Zurich ShieldTM Windshield Protection.

According to Tina Mallie, head of Direct Markets for Zurich’s North America Commercial business, current research shows new-vehicle buyers are holding on to their cars and trucks for longer periods, making quality F&I products like Zurich ShieldTM an even more valuable profit-generator for automobile dealers’ than ever before.

Zurich ShieldTM Windshield Protection is an addition to the already popular Zurich ShieldTM Environmental Protection product, which was designed to protect the interior and exterior of a vehicle from harmful elements, road grime, stains and normal wear and tear.

Mallie said, “Another selling point for automobile dealers to share with their customers is how Zurich’s F&I products can also increase the resale value of a vehicle by providing a defense mechanism against exterior and interior damage.”

Zurich also offers automobile, truck and powersport dealers the following F&I products:

  • Vehicle service contracts
  • Certified vehicle program
  • Maintenance program
  • Road hazard tire & wheel
  • Guaranteed Auto Protection (GAP)
  • Universal Security Guard® theft-deterrent system

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JM&A May Buy F&I Companies to Grow in West

Financial services giant JM&A Group, a powerhouse in the Southeast, is aiming to grow in the rest of the United States. The main target for expansion is the West, and JM&A executives say they will consider purchasing smaller providers to pick up share in the finance and insurance market, reported Automotive News. But executives also have expanded the sales team and increased marketing and incentive budgets to help pitch JM&A’s services to large dealership groups west of the Mississippi.

That market is largely untapped by JM&A, a unit of JM Family Enterprises, the Deerfield Beach, Fla., company founded by Jim Moran. The F&I unit got its start 32 years ago acting as a captive finance company for Toyota dealerships in Florida, Georgia, Alabama and the Carolinas that were serviced by JM’s Southeast Toyota, exclusive distributor of Toyota and Lexus vehicles in that corner of the country.

“We have a 30 percent market share in the Southeast, and there is no reason we couldn’t achieve the same market share over time across the country,” said Colin Brown, CEO of JM Family Enterprises. “There is a lot of growth out there” even if industry volumes don’t come back, he said.

That share — or penetration rate — means JM&A sells at least one product on three of every 10 new and used vehicles sold in the Southeast. On the East Coast, penetration is 8 percent. It’s 6.6 percent in the West and even lower in major Western states such as California and Nevada.

“As we get beyond where we started, the opportunity tends to really stick out,” said Forrest Heathcott, president of JM&A. “Those are some pretty key markets where there’s a lot of population.”

In the next five years, JM&A intends to boost penetration in the West to 10 percent, Heathcott said. He said it could take 15 years to match the 30 percent share of the Southeast.

“These are big decisions for dealers to make, and they don’t come quickly,” Heathcott said.

To accelerate the expansion, JM&A has “budgeted for some very thoughtful, formidable acquisitions,” Heathcott said. He wouldn’t share numbers but said JM&A already is in discussions with independent agencies and smaller insurance companies.

Heathcott said JM&A increased its marketing and incentive budgets about 25 percent each this year. Incentives typically include dealer rewards or trips.

Growth by acquisition would be a first for JM&A, Heathcott said. The acquisition target area includes California, Washington, Oregon, Arizona, Texas, Oklahoma and Colorado.

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Consumer Advocacy Product Introduced to Dealer Market at NIADA

LAS VEGAS – Repair Assurance, a new F&I product introduced at the NIADA convention, is a vehicle service agreement that offers different consumer benefits and fresh opportunities for dealers. Consumers receive representation when dealing with auto repair facilities and warranty companies.

Consumers who purchase plans of coverage, ranging from one to five years, have a dedicated Repair Assurance repair adviser that will fully negotiate with a repair facility or warranty company all aspects of any repair or maintenance service.

The Repair Assurance adviser ensures that the correct repair is being done at the correct price and at the correct time. This service is unlimited and consumers can contact their adviser as many times as they wish to ask questions or get advice on any auto repair or maintenance issues.

Repair facilities can also call Repair Assurance directly before beginning a repair to work with a customer’s adviser directly. The adviser steps in to negotiate the entire repair on the customer’s behalf.

In addition to the advocacy service, Repair Assurance offers a complete spectrum of ancillary service agreement benefits such as towing, fuel and fluid delivery, lost key & lockout, flat tire and extrication services. Additional discounts are provided on rental vehicles.

Repair Assurance was conceived and developed by Tom Cullen and his partner Tony Fiorillo of Vision Marketing Group, based in West St. Paul, Minn. Cullen said the idea for this product came to him after witnessing the downsizing of a highly respected service contract administrator in Omaha, Neb.

“I thought it was a waste of talent to let all those experienced claims people go,” Cullen said. “Then it occurred to me that if they could adjudicate claims and work with repair shops to defend the insurance company, why not defend the consumer?”

Cullen added that Repair Assurance is a complementary product for the F&I office because it is priced lower than a service contract and can be used by the F&I manager as an alternative when the customer refuses a VSC due to price or payments concerns. It also is designed to increase service department retention by directing the consumer back to the selling dealership to get work done on their vehicle, especially with used vehicles.

Tony Fiorillo said he is excited about the quality service they can offer dealers and consumers.

“We feel fortunate to have a wealth of talent to bring into the company for consumers to turn to. The people we’re hiring have years of automotive experience and expertise in dealing with repair facilities from independent shops right up to OEM factory representatives. This product can really help dealers improve their CSI because now consumers feel the dealership is sending a repair advocate out with them when they drive off the lot.”

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